Sarla Textiles Ltd. (ST) was enjoying a cash credit (CC) limit of ₹20 lakh with XYZ bank. Initially this CC limit was of ₹ 1 lakh only during the financial year 2014-15. However, on account of the continuous sale rise an

Sarla Textiles Ltd. (ST) was enjoying a cash credit (CC) limit of ₹20 lakh with XYZ bank. Initially this CC limit was of ₹ 1 lakh only during the financial year 2014-15. However, on account of the continuous sale rise and integrity of the proprietor the limit was gradually increased on an annual basis. Meanwhile Branch Managers were also changed and the incoming Branch Manager, never visited the business premises of ST. Proprietor of ST actually diverted his business from cloth to construction, and shop activity was closed. However, the owner of ST fabricated the figures and was regularly submitting the stock statement and the annual accounts to the bank, reflecting the increased turnover and profit figures and was regular to deposit the interest amount in the account. In June 2019, a new manager was appointed at the branch. The CC limit of the ST was also due for its renewal, however, the Branch Manager was reluctant to renew the papers only on the basis of the financial papers and insisted for the spot verification and on the basis of the address recorded in the books of the branch, visited the addresss. Branch Manager did not found shop at the aforementioned address. Branch Manager also enquired about the whereabouts of the ST from neighbourhood, but he was informed that they have not seen the owner and that such shop was shut several years ago. The Branch Manager lodged FIR against the proprietor about the absconding of the borrower and sought further instructions form the Regional Officer of the Bank. (ii) Whether the action of the new Branch Manager in renewing the limits only after making the field visit, was justified ?